A British biotech firm whose founder was trying to regain control of a $3 billion company has been targeted by an activist investor who is dubbed the “most feared man” in corporate America.
Starboard Value (Jeff Smith) is a New York hedge fund that has taken an estimated 2 percent stake in Abcam. Abcam is a Cambridge antibody company that abandoned its London listing last year to list on the US Nasdaq.
Jonathan Milner is using his 6.3% stake in the company to try to get reinstalled to executive chairman. He has called an extraordinary general assembly and is working closely with advisers Georgeson in order to make his case.
Milner writes in a memo to be sent tomorrow to investors that the company can only reverse its “sustained underperformance” and “value destruction” through his leadership.
Milner attributed the poor performance to a lack focus and spiraling costs, which included a $165,000,000 software upgrade. Abcam denied that the company’s performance had declined. He demanded the dismissal of three members of the board. He also blasts his company’s decision to leave London’s Aim Market to list on Nasdaq last year, which he calls “poorly implemented”.
Milner claims that he had to pay nearly £600,000.00 to convert his shares to normal shares in order to call an EGM. He alleges this violates his rights as an investor. Abcam stated that Milner was initially in favor of the listing, and the shares contract was compliant with best practices.
Abcam’s spokesman stated that Milner’s claims are “without merit and self-serving”. They stated: “We worked tirelessly and in a constructive manner with Dr Milner, including offering him a board seat. He wants to take back control of the company where he was an executive director for nine years.